A PROPOSED MERGER deal between two pharmaceutical companies, which would have been the biggest of its kind in history, has reportedly been cancelled.
CNBC reports that the proposed deal between US pharmaceutical giant Pfizer and the smaller drug company Allergen (which has its headquarters in Dublin) has been called off, according to sources.
The deal – which would have seen the New York-based Pfizer move its tax base to Ireland – would have been the largest “tax inversion” deal in history.
This is a complex merger whereby the smaller, Dublin-headquartered Allergan would take over Pfizer. With the company being renamed Pfizer PLC.
The confusing and complicated mergers have been strongly criticised in the past as ways for large companies to avoid paying tax.
New rules
The decision to end the deal comes as the US Treasury Department announced a new package of rules on Monday aimed at making these tax inversion deals less financially appealing.
The new regulations, the third round that the Treasury has put forward on inversions, seek to limit internal corporate borrowing that shifts profits out of the United States.
On Monday night, Pfizer and Allergan issued a joint statement saying that they are reviewing the new Treasury rules and would not speculate on their potential impact.
Now, according to reports it seems that the board of Pfizer has voted against the proposed merger with Allergen.
CNBC also reports that Pfizer may need to pay Allergen a $400 million break fee in accordance with the agreement of the merger.
- With reporting from AFP
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